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How To Narrow The Racial Wealth Gap And Expand Access To Underbanked Consumers
The social unrest following George Floyd’s murder in the spring of 2020 pushed Connex Credit Union ($868.6M, North Haven, CT) to more closely examine its role in advancing issues related to diversity, equity, and inclusion.
Although the credit union already conducted internal DEI training, CEO Frank Mancini explains that several board members wanted Connex to make a stronger outward push, with an eye toward helping close the racial wealth gap and serving the underserved. Four board members launched a social justice committee chaired by a cultural anthropologist from Yale. The group began by setting objectives and ensuring board and management were on the same page, but the task quickly turned to aligning these issues with the bigger picture of running the credit union — no small challenge in the early months of a global pandemic.
“They understood we had an aggressive set of credit union objectives already and were balancing normal business issues layered with pandemic complexities like staffing challenges, cost increases, supply chain issues, and more,” Mancini says. "They felt adding this commitment was a critically important statement of what we stood for and a mechanism for future growth. That dial is continually being adjusted to set the right expectation level, while conveying the board’s sense of urgency for action.”
With the board’s input, Connex identified several areas that impact the racial wealth gap.
Learn more in “Inside Connex’s DEI Journey.”
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Serious About Service
Every year, hundreds of organizations come together in April to encourage military and veteran communities to save money, reduce debt, and build wealth as part of Military Saves Month, a component of the America Saves campaign sponsored by Consumer Federation of America.
According to the official Military Saves 2021 annual report, more than 489 installations, organizations, financial institutions, and government entities participated, encouraged, and supported the initiative in 2021, reaching 10.7 million military and veteran community members in April alone.
Military Saves awarded 11 military-affiliated banks and credit unions the Designation of Savings Excellence for 2021, recognizing their extraordinary efforts. Three credit unions were among those recipients: Community Resource FCU, Pioneer Valley FCU, and Travis Credit Union.
Learn more in “Strategies To Encourage Military Members To Manage Money And Build Wealth.”
Impact As Easy As 123
South Carolina Federal Credit Union ($2.4B, North Charleston, SC) created its foundation in 2012 to support the charitable or educational efforts of other nonprofit organizations, thereby formalizing its own philanthropic endeavors. According to the foundation’s website, anyone can become a member of the 501(c)(3) with a donation of $5 or more, but the credit union makes it even easier for SC Federal employees to participate.
“The foundation allows employees to contribute to a specific number of charities via payroll deduction,” says Beth Jaskiewicz, executive director of the South Carolina Federal Credit Union Foundation. “So, engagement is important.”
Employee engagement, in fact, is the driver behind the credit union’s “charity liaisons,” a group of SC Federal employees who stay on top of a selected charity partner’s needs and advocate for the charity with co-workers. According to Jaskiewicz, succeeding at being a charity liaison is as easy as ABC: always be communicating.
Learn more in “The ABCs Of Engagement And Philanthropy.”
Tax Assistance For Everyone
Credit unions’ long history of community service extends beyond lending and savings. This time of year, especially, cooperatives participating in the federal government’s Volunteer Income Tax Assistance (VITA) program help community members maximize tax returns at a minimal expense: Free.
The VITA program offers hands-on tax preparation by IRS-certified volunteers to assist people who make $54,000 or less a year, have disabilities, are elderly, or who speak limited English.
Along with saving the participants the filing fees charged by private services, the VITA program helps ensure households receive their maximum refunds plus all the benefits to which they’re entitled through the federal Earned Income Tax Credit and other federal and state tax credit programs.
VITA sites pop up each spring at such locations as libraries, schools, shopping malls, community and neighborhood centers, and, of course, credit unions.
Learn more in “4 Ways Credit Unions Make Tax Time Less Taxing.”
Member Education + Public Relations = Brand Impact
Public and member relations have merged under Grant Gallagher’s leadership at Affinity Federal Credit Union ($3.8B, Basking Ridge, NJ).
Gallagher joined the Garden State cooperative as a senior chat specialist in 2009 and is now entering his second year as Affinity’s head of financial wellbeing and brand communications. He also leads his credit union’s participation in the Callahan-Gallup Collaborative Financial Wellbeing and Member Engagement Program.
His responsibilities have grown over the past decade, and his new role is a culmination of the realization that financial wellbeing and external communications — with the general public and public officials alike — are part and parcel to helping ensure the credit union can maximize its ability to have a positive impact.
Learn more in “What’s In A Name: Head Of Financial Wellbeing And Brand Communications.”
Forums For Financial Inclusion
Travis Credit Union ($4.7B, Vacaville, CA) hosted its first Financial Inclusion Forums, beginning in late 2021 and continuing into this year, to address a range of issues around inclusion. These events are intended to help the credit union better meet its goal of providing access to affordable financial services for unbanked consumers in its market.
The events took place in December and January, with one forum in each of the five different counties where Travis has a presence. Each forum includes executives from the credit union, along with leaders from various communities Travis serves, including Hispanic and Black chambers of commerce, county supervisors, school superintendents, and more.
According to Damian Alarcon, director of community relations, the credit union’s existing network of community partners was a natural starting point for a wide-ranging discussion
“The people who showed up in the room — chambers of commerce, whether they were groups representing a city or minority group — all knew us through our community relations team or branches, and they came in and chose to trust us that we were going to have an open conversation,” Alarcon says.
Learn more in “Behind The Scenes Of Financial Inclusion At Travis Credit Union.”
Fee-Free For Life
United Federal Credit Union ($3.9B, St. Joseph, MI) wasn’t fooling around when it chose April 1 as its effective date for eliminating overdraft protection and non-sufficient fund fees. The Michigan-based cooperative — which operates through 41 branches in six states — also slashed its courtesy pay fee from $35 to $20 for its nearly 191, 000 members.
Meanwhile, Amplify Credit Union ($1.4B, Austin, TX) has eliminated all banking fees on all deposit products for all 58,014 of its individual and business members. The Texas cooperative began publicizing that that on Feb. 2 — turning Groundhog Day into “Fee Free Day” and ending a cycle of financially vulnerable members, in particular, paying such fees over and over again.
Both cooperatives are part of a trend toward lowering or eliminating a lot of those so-called punitive forms of non-interest income, including by some of the major national banks earlier this year.
“Members don’t hate fees because they cost too much. Members hate fees because they feel being charged for them is wrong.”
Stacy Armijo, chief experience officer at Amplify, says her cooperative’s decision is the culmination of a journey into behavioral economics that began three years ago when Amplify commissioned research on consumers’ motivations around checking and savings accounts.
Learn more in “2 Ways To Approach Fee Relief For Members.”
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